PURCHASE AGREEMENT among Hersha Hospitality Limited Partnership Hersha Statutory Trust I and Merrill Lynch International Dated as of May 11, 2005
EXHIBIT
10.1
among
Hersha
Hospitality Limited Partnership
Hersha
Statutory Trust I
and
Xxxxxxx
Xxxxx International
________________
Dated as
of
May 11, 2005
________________
($25,000,000
Trust Preferred Securities)
THIS
PURCHASE AGREEMENT, dated as of May 11, 2005 (this "Purchase
Agreement"), is
entered into among Hersha Hospitality Limited Partnership, a Virginia limited
partnership (the
"Company"),
Hersha Statutory Trust I, a Delaware
statutory trust
(the "Trust", and
together with the Company, the "Sellers"), and
Xxxxxxx Xxxxx International or its assignee (the "Purchaser").
WITNESSETH:
WHEREAS,
the Sellers propose to issue and sell 25,000 Preferred Securities of the Trust,
having a stated liquidation amount of $1,000 per security (the "Preferred
Securities");
WHEREAS,
the entire proceeds from the sale of the Preferred Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its common
securities (the "Common
Securities"), and
will be used by the Trust to purchase Twenty-Five Million Seven Hundred
Seventy-Four Thousand Dollars ($25,774,000) in principal amount of the unsecured
junior subordinated notes of the Company (the "Junior
Subordinated Notes");
WHEREAS,
the Preferred Securities and the Common Securities for the Trust will be issued
pursuant to the Amended
and Restated Trust
Agreement (the "Trust
Agreement"), dated
as of the Closing Date, among the Company, as depositor, JPMorgan Chase Bank,
National Association, a national banking association, as property trustee (in
such capacity, the "Property
Trustee"), Chase
Bank USA, National Association, a national banking association, as
Delaware trustee (in such capacity, the "Delaware
Trustee"), the
Administrative Trustees named therein (in such capacities, the "Administrative
Trustees") and
the holders from time to time of undivided beneficial interests in the assets of
the Trust; and
WHEREAS,
the Junior Subordinated Notes will be issued pursuant to a Junior Subordinated
Indenture, dated as of the Closing Date (the "Indenture"),
between the Company and JPMorgan Chase Bank, National Association, a national
banking association, as indenture trustee (in such capacity, the "Indenture
Trustee").
NOW,
THEREFORE, in consideration of the mutual agreements and subject to the terms
and conditions herein set forth, the parties hereto agree as
follows:
1. Definitions. The
Preferred Securities, the Common Securities and the Junior Subordinated Notes
are collectively referred to herein as the "Securities." This
Purchase Agreement, the Indenture, the Trust Agreement and the Securities are
collectively referred to herein as the "Operative
Documents." All
other capitalized terms used but not defined in this Purchase Agreement shall
have the respective meanings ascribed thereto in the Indenture.
2. Purchase
and Sale of the Preferred Securities.
(a) The
Sellers agree to sell to the Purchaser, and the Purchaser agrees to purchase
from the Sellers the Preferred Securities for an amount (the "Purchase
Price") equal
to Twenty-Five Million Dollars ($25,000,000). The Purchaser shall be responsible
for the rating agency costs and expenses. The Sellers shall use the Purchase
Price, together with the proceeds from the sale of the Common Securities, to
purchase the Junior Subordinated Notes.
(b) Delivery
or transfer of, and payment for, the Preferred Securities shall be made at 11:00
A.M. Eastern Daylight time (11:00 A.M. New York time), on May 13, 2005, (such
date and time of delivery and payment for the Preferred Securities being herein
called the "Closing
Date"). The
Preferred Securities shall be transferred and delivered to the Purchaser against
the payment of the Purchase Price to the Sellers made by wire transfer in
immediately available funds on the Closing Date to a U.S. account designated in
writing by the Company at least two business days prior to the Closing
Date.
(c) Delivery
of the Preferred Securities shall be made at such location, and in such names
and denominations, as the Purchaser shall designate at least two business days
in advance of the Closing Date. The Company and the Trust agree to have the
Preferred Securities available for inspection and checking by the Purchaser not
later than 2:00 P.M., Eastern Daylight time, on the business day prior to the
Closing Date. The closing for the purchase and sale of the Preferred Securities
shall occur at the offices of Xxxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000, or such other place as the parties hereto shall
agree.
3. Conditions. The
obligations of the parties under this Purchase Agreement are subject to the
following conditions:
(a) The
representations and warranties contained herein shall be accurate as of the date
of delivery of the Preferred Securities.
(b) The
Purchaser shall have sold securities issued by it in such an amount that the net
proceeds therefrom shall be available on the Closing Date and shall be
sufficient to purchase the Preferred Securities and all other preferred
securities contemplated in agreements similar to this Agreement.
(c) Hunton
& Xxxxxxxx LLP, counsel for the Company and the Trust (the "Company
Counsel"), shall
have delivered an opinion, dated the Closing Date, addressed to the Purchaser,
Xxxxx Bros. Securities, LLC and JPMorgan Chase Bank, National Association, in
substantially the form set out in Annex
A-I hereto
and (ii) the Company shall have furnished to the Purchaser the opinion of the
Company's General Counsel or a certificate signed by the Chief Executive
Officer, President, an Executive Vice President, Chief Financial Officer,
Treasurer or Assistant Treasurer of Hersha Hospitality Trust, a Maryland real
estate investment trust and the general partner and the Company ("HHT"), dated
the Closing Date, addressed to the Purchaser, in substantially the form set out
in Annex
A-II hereto.
In rendering their opinion, the Company Counsel may rely as to factual matters
upon certificates or other documents furnished by officers, directors and
trustees of the Company and the Trust and by government officials (provided,
however, that copies of any such certificates or documents are delivered to the
Purchaser) and by and upon such other documents as such counsel may, in their
reasonable opinion, deem appropriate as a basis for the Company Counsel's
opinion. The Company Counsel may specify the jurisdictions in which they are
admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. If the
Company Counsel is not admitted to practice in the State of New York, the
opinion of the Company Counsel may assume, for purposes of the opinion, that the
laws of the State of New York are substantively identical, in all respects
material to the opinion, to the internal laws of the state in which such counsel
is admitted to practice. Such Company Counsel Opinion shall not state that they
are to be governed or qualified by, or that they are otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
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(d) The
Purchaser shall have been furnished the opinion of Xxxxxxxxx & Xxxxxxxx LLP,
special tax counsel for the Purchaser, dated the Closing Date, addressed to the
Purchaser and JPMorgan Chase Bank, National Association, and HHT, in
substantially the form set out in Annex
B hereto.
(e) The
Purchaser shall have received the opinion of Xxxxxxxx,
Xxxxxx & Finger, P.A., special
Delaware
counsel
for the Delaware Trustee, dated the Closing Date, addressed to the Purchaser,
JPMorgan Chase Bank, National Association, the Delaware Trustee and the Company,
in substantially the form set out in Annex
C
hereto.
(f) The
Purchaser shall have received the opinion of Gardere Xxxxx Xxxxxx LLP, special
counsel for the Property Trustee and the Indenture Trustee, dated the Closing
Date, addressed to the Purchaser, in substantially the form set out in
Annex
D
hereto.
(g) The
Purchaser shall have received the opinion of Xxxxxxxx, Xxxxxx & Finger,
P.A., special Delaware counsel for the Delaware Trustee, dated the Closing Date,
addressed to the Purchaser and
JPMorgan Chase Bank, National Association, in
substantially the form set out in Annex
E
hereto.
(h) The
Company shall have furnished to the Purchaser a certificate, signed by the Chief
Executive Officer, President or an Executive Vice President, and Chief Financial
Officer, Treasurer or Assistant Treasurer of HHT, and the Trust shall have
furnished to the Purchaser a certificate of the Trust, signed by an
Administrative Trustee of the Trust, in each case dated the Closing Date, and,
in the case of the Company, as to (i) and (ii) below and, in the case of the
Trust, as to (i) below.
(i) the
representations and warranties in this Purchase Agreement are true and correct
on and as of the Closing Date with the same effect as if made on the Closing
Date, and the Company and the Trust have complied with all the agreements and
satisfied all the conditions on either of their part to be performed or
satisfied at or prior to the Closing Date; and
(ii) since
December 31, 2004 (the date of the latest Financial Statements), there has been
no material adverse change in the business properties, management, financial
condition or results of operations of the Company and its subsidiaries, whether
or not arising from transactions occurring in the ordinary course of business (a
"Material
Adverse Change").
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(i) Subsequent
to the execution of this Purchase Agreement, there shall not have been any
change, or any development involving a prospective change, in or affecting the
condition (financial or other), earnings, business or assets of the Company and
its subsidiaries, whether or not occurring in the ordinary course of business,
the effect of which is, in the Purchaser's judgment, so material and adverse as
to make it impractical or inadvisable to proceed with the purchase of the
Preferred Securities.
(j) Prior to
the Closing Date, the Company and the Trust shall have furnished to the
Purchaser and its counsel such further information, certificates and documents
as the Purchaser or its counsel may reasonably request.
If any of
the conditions specified in this Section 3 shall
not have been fulfilled when and as provided in this Purchase Agreement, or if
any of the opinions, certificates and documents mentioned above or elsewhere in
this Purchase Agreement shall not be reasonably satisfactory in form and
substance to the Purchaser or its counsel, this Purchase Agreement and all the
Purchaser's obligations hereunder may be canceled at, or at any time prior to,
the Closing Date by the Purchaser. Notice of such cancellation shall be given to
the Company and the Trust in writing or by telephone or facsimile confirmed in
writing.
Each
certificate signed by any trustee of the Trust or any officer of the Company and
delivered to the Purchaser or the Purchaser's counsel in connection with the
Operative Documents and the transactions contemplated hereby and thereby shall
be deemed to be a representation and warranty of the Trust and/or the Company,
as the case may be, and not by such trustee or officer in any individual
capacity.
4. Representations
and Warranties of the Company and the Trust. The
Company and the Trust jointly and severally represent and warrant to, and agree
with the Purchaser, as follows:
(a) Neither
the Company nor the Trust, nor any of their "Affiliates" (as defined in Rule
501(b) of Regulation D ("Regulation
D") under
the Securities Act (as defined below)), nor any person acting on its or their
behalf, has, directly or indirectly, made offers or sales of any security, or
solicited offers to buy any security, under circumstances that would require the
registration of any of the Securities under the Securities Act of 1933, as
amended (the "Securities
Act").
(b) Neither
the Company nor the Trust, nor any of their Affiliates, nor any person acting on
its or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of any of the Securities.
(c) The
Securities (i) are not and have not been listed on a national securities
exchange registered under section 6 of the Securities Exchange Act of 1934, as
amended (the "Exchange
Act"), or
quoted on a U.S. automated inter-dealer quotation system and (ii) are not of an
open-end investment company, unit investment trust or face-amount certificate
company that are, or are required to be, registered under section 8 of the
Investment Company Act of 1940, as amended (the "Investment
Company Act"), and
the Securities otherwise satisfy the eligibility requirements of Rule 144A(d)(3)
promulgated pursuant to the Securities Act ("Rule
144A(d)(3)").
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(d) Neither
the Company nor the Trust, nor any of their Affiliates, nor any person acting on
its or their behalf, has engaged, or will engage, in any "directed selling
efforts" within the meaning of Regulation S under the Securities Act with
respect to the Securities.
(e) Neither
the Company nor the Trust is, and, immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds
therefrom, will not be, an "investment company" or an entity "controlled" by an
"investment company," in each case within the meaning of section 3(a) of the
Investment Company Act.
(f) Neither
the Company nor the Trust has paid or agreed to pay to any person any
compensation for soliciting another to purchase any of the Securities, except
for the sales commission in the amount of $750,000, the Company has agreed to
pay to Xxxxx Bros. Securities, LLC pursuant to the letter agreement between HHT
and Xxxxx Bros. Securities, LLC.
(g) The Trust
has been duly created and is validly existing in good
standing as a statutory
trust
under the Delaware Statutory
Trust
Act, 12 Del. C. §3801, et
seq. (the
"Statutory Trust
Act") with all
requisite power and authority to own property and to conduct the business it
transacts and proposes to transact and to enter into and perform its obligations
under the Operative Documents to which it is a party. The Trust is duly
qualified to transact business as a foreign entity and is in good standing in
each jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a material adverse
effect on the condition (financial or otherwise), earnings, business or assets
of the Trust, whether or not occurring in the ordinary course of business. The
Trust is not a party to or otherwise bound by any agreement other than the
Operative Documents. The Trust is and will be, under current law, classified for
U.S. federal income tax purposes as a grantor trust and not as an association or
publicly traded partnership taxable as a corporation.
(h) The Trust
Agreement has been duly authorized by the Company and, on the Closing Date
specified in Section
2(b), will
have been duly executed and delivered by the Company and the Administrative
Trustees of the Trust, and, assuming due authorization, execution and delivery
by the Property Trustee and the Delaware Trustee, will be a legal, valid and
binding obligation of the Company and the Administrative Trustees, enforceable
against them in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether the issue
of enforceability is considered in a proceeding at law or in equity). Each of
the Administrative Trustees of the Trust is an employee of the Company and has
been duly authorized by the Company to execute and deliver the Trust
Agreement.
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(i) The
Indenture has been duly authorized by the Company and, on the Closing Date, will
have been duly executed and delivered by the Company, and, assuming due
authorization, execution and delivery by the Indenture Trustee, will be a legal,
valid and binding obligation of the Company enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether the issue of enforceability is considered in a
proceeding at law or in equity).
(j) The
Preferred Securities and the Common Securities have been duly authorized by the
Trust and, when issued and delivered against payment therefor on the Closing
Date in accordance with this Purchase Agreement, in the case of the Preferred
Securities, and in accordance with the Common Securities Subscription Agreement,
in the case of the Common Securities, will be validly issued, fully paid and
non-assessable and will represent undivided beneficial interests in the assets
of the Trust entitled to the benefits of the Trust Agreement, enforceable
against the Trust in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and similar laws affecting creditors'
rights generally and to general principles of equity (regardless of whether the
issue of enforceability is considered in a proceeding at law or in equity). The
issuance of the Securities is not subject to any preemptive or other similar
rights. On the Closing Date, all of the issued and outstanding Common Securities
will be directly owned by the Company free and clear of any pledge, security
interest, claim, lien or other encumbrance of any kind (each, a "Lien").
(k) The
Junior Subordinated Notes have been duly authorized by the Company and, on the
Closing Date, will have been duly executed and delivered to the Indenture
Trustee for authentication in accordance with the Indenture and, when
authenticated in the manner provided for in the Indenture and delivered to the
Trust against payment therefor in accordance with the Junior Subordinated Note
Purchase Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether the issue
of enforceability is considered in a proceeding at law or in
equity).
(l) This
Purchase Agreement has been duly authorized, executed and delivered by the
Company and the Trust.
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(m) Neither
the issue and sale of the Common Securities, the Preferred Securities or the
Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes by
the Trust, nor the execution and delivery of and compliance with the Operative
Documents by the Company or the Trust, nor the consummation of the transactions
contemplated herein or therein, (i) will conflict with or constitute a violation
or breach of the Trust Agreement or the organizational documents of the Company
or any subsidiary of the Company or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, governmental
authority, agency or instrumentality or court, domestic or foreign, having
jurisdiction over the Trust or the Company or any of its subsidiaries or their
respective properties or assets (collectively, the "Governmental
Entities"), (ii)
will conflict with or constitute a violation or breach of, or a default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any Lien upon any property or assets of the Trust, the Company or
any of the Company's subsidiaries pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to which
(A) the Trust, the Company or any of its subsidiaries is a party or by which it
or any of them may be bound, or (B) to which any of the property or assets of
any of them is subject, or any judgment, order or decree of any court,
Governmental Entity or arbitrator, except, in the case of this clause (ii), for
such conflicts, breaches, violations, defaults, Repayment Events (as defined
below) or Liens which (X) would not, singly or in the aggregate, materially and
adversely affect the consummation of the transactions contemplated by the
Operative Documents and (Y) would not, singly or in the aggregate, have a
material adverse effect on the business, properties, financial condition, or
results of operations or prospects of the Company and its subsidiaries taken as
a whole, whether or not occurring in the ordinary course of business (a
"Material
Adverse Effect") or
(iii) require the consent, approval, authorization or order of any court or
Governmental Entity. As used herein, a "Repayment
Event" means
any event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Trust or the Company or any of its subsidiaries prior
to its scheduled maturity.
(n) The
Company has been duly organized and is validly existing as a limited partnership
in good standing under the laws of Maryland, with all requisite power and
authority to own, lease and operate its properties and conduct its business as
now being conducted and as proposed to be conducted, and is duly qualified to
transact business and is in good standing in each jurisdiction where the nature
of its activities requires such qualification, except where the failure of the
Company to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.
(o) The
Company has no subsidiaries that are material to its business, financial
condition or earnings other than those subsidiaries listed in Schedule
1 attached
hereto (collectively, the "Significant
Subsidiaries"). Each
Significant Subsidiary has been duly organized and is validly existing as a
corporation, limited liability company, limited partnership or trust in good
standing under the laws of the jurisdiction in which it is chartered or
organized, with all requisite corporate power and authority to own, lease and
operate its properties and conduct its respective business as now being
conducted and as proposed to be conducted. Each Significant Subsidiary is duly
qualified to transact business and is in good standing in each jurisdiction
where the nature of its activities requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect.
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(p) Each of
the Trust, the Company and each of the Company's subsidiaries hold all necessary
approvals, authorizations, orders, licenses, consents, registrations,
qualifications, certificates and permits (collectively, the "Governmental
Licenses") of and
from Governmental Entities necessary to conduct their respective businesses as
now being conducted, and neither the Trust, the Company nor any of the Company's
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Government License, except where the failure to be
so licensed or approved or the receipt of an unfavorable decision, ruling or
finding, would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and effect, except
where the invalidity or the failure of such Governmental Licenses to be in full
force and effect, would not, singly or in the aggregate, have a Material Adverse
Effect; and the Company and its subsidiaries are in compliance with all laws,
rules, regulations, judgments, orders, decrees and consents applicable to their
respective businesses, except where the failure to be in compliance would not,
singly or in the aggregate, have a Material Adverse Effect.
(q) All of
the issued and outstanding units in the Company and all of the issued and
outstanding shares of capital stock of or other ownership interests in each of
its subsidiaries are validly issued, fully paid and non-assessable; the Company
owns the interests in each of its subsidiaries as provided on Schedule 2; the
ownership interest in each of its subsidiaries is owned by the Company, free and
clear of any Lien, claim or equitable right; and none of the issued and
outstanding units in the Company and none of the issued and outstanding capital
stock of any subsidiary was issued in violation of any preemptive or similar
rights arising by operation of law of their respective jurisdiction of
organization, under the organizational documents of such entity or under any
agreement to which the Company or any of its subsidiaries is a
party.
(r) Neither
the Company nor any of its subsidiaries is (i) in violation of its respective
organizational documents or (ii) in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any such subsidiary is a party or by which it
or any of them may be bound or to which any of the property or assets of any of
them is subject, except, in the case of clause (ii), where such violation or
default would not, singly or in the aggregate, have a Material Adverse
Effect.
(s) There is
no action, suit or proceeding before or by any Governmental Entity, arbitrator
or court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust after due inquiry, threatened against or affecting the Trust or the
Company or any of the Company's subsidiaries, except for such actions, suits or
proceedings that, if adversely determined, would not, singly or in the
aggregate, adversely affect the consummation of the transactions contemplated by
the Operative Documents or have a Material Adverse Effect; and the aggregate of
all pending legal or governmental proceedings to which the Trust or the Company
or any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation
incidental to the business, are not reasonably expected to result in a Material
Adverse Effect.
(t) The
accountants of HHT who certified the Financial Statements (as defined below) are
independent public accountants of HHT and its subsidiaries, including the
Company, within the meaning of the Securities Act, and the rules and regulations
of the Securities and Exchange Commission (the "Commission")
thereunder.
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(u) The
audited consolidated financial statements (including the notes thereto) and
schedules of HHT and its consolidated subsidiaries for the fiscal year ended
December 31, 2004 (the "Financial
Statements") and
the interim unaudited consolidated financial statements of HHT and its
consolidated subsidiaries for the quarter ended March 31, 2005 ("Interim
Financial Statements") provided to the Purchaser are the most recent
available audited and unaudited consolidated financial statements of the Company
and its consolidated subsidiaries, respectively, and fairly present in all
material respects, in accordance with U.S. generally accepted accounting
principles ("GAAP"), the financial position of the Company and its consolidated
subsidiaries, and the results of operations and changes in financial condition
as of the dates and for the periods therein specified, subject, in the case of
Interim Financial Statements, to year-end adjustments (which are expected to
consist solely of normal recurring adjustments). Such consolidated financial
statements and schedules have been prepared in accordance with GAAP consistently
applied throughout the periods involved (except as otherwise noted
therein).
(v) None of
the Trust, the Company nor any of its subsidiaries has any material liability,
whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes (and there
is no past or present fact, situation, circumstance, condition or other basis
for any present or future action, suit, proceeding, hearing, charge, complaint,
claim or demand against the Company or its subsidiaries that could give rise to
any such liability), except for (i) liabilities set forth in the Financial
Statements or the Interim Financial Statements and (ii) normal fluctuations
in the amount of the liabilities referred to in clause (i) above occurring
in the ordinary course of business of the Trust, the Company and all of its
subsidiaries since the date of the most recent balance sheet included in such
Financial Statements.
(w) Since the
respective dates of the Financial Statements and the Interim Financial
Statements, there has not been (A) any Material Adverse Change or (B) any
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock other than regular quarterly dividends on the
Company's common stock.
(x) The
documents of HHT filed with the Commission in accordance with the Exchange Act,
from and including the commencement of the fiscal year covered by HHT's most
recent Annual Report on Form 10-K, at the time they were or hereafter are filed
by HHT with the Commission (collectively, the "1934
Act Reports"),
complied and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder (the
"1934
Act Regulations"), and,
at the date of this Purchase Agreement and on the Closing Date, do not and will
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and other than such instruments, agreements, contracts and other documents as
are filed as exhibits to HHT's Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character described in Item 601 of
Regulation S-K promulgated by the Commission to which HHT or any of its
subsidiaries is a party. HHT is in compliance with all currently applicable
requirements of the Exchange Act that were added by the Xxxxxxxx-Xxxxx Act of
2002.
(y) No labor
dispute with the employees of the Trust, the Company or any of its subsidiaries
exists or, to the knowledge of the executive officers of the Trust or the
Company, is imminent, except those which would not, singly or in the aggregate,
have a Material Adverse Effect.
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(z) No filing
with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any Governmental Entity, other than those that have
been made or obtained and any required under the securities or blue sky laws of
the jurisdiction in which the Securities are being offered, is required for the
performance by the Trust or the Company of their respective obligations under
the Operative Documents, as applicable, or the consummation by the Trust and the
Company of the transactions contemplated by the Operative
Documents.
(aa)
Each of
the Trust, the Company and each subsidiary of the Company has good and
marketable title to all of its respective real and personal properties, in each
case free and clear of all Liens and defects, except for those (i) related
to debt financings as provided on Schedule
3 or
(ii) that would not, singly or in the aggregate, have a Material Adverse
Effect; and all of the leases and subleases under which the Trust, the Company
or any subsidiary of the Company holds properties are in full force and effect,
except where the failure of such leases and subleases to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse Effect,
and none of the Trust, the Company or any subsidiary of the Company has any
notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Trust, the Company or any subsidiary of the Company under any such
leases or subleases, or affecting or questioning the rights of such entity to
the continued possession of the leased or subleased premises under any such
lease or sublease, except for such claims that would not, singly or in the
aggregate, have a Material Adverse Effect.
(bb)
Commencing
with its taxable year ended December 31, 1999, HHT has been, and upon the
completion of the transactions contemplated hereby, HHT will continue to be,
organized and operated in conformity with the requirements for qualification and
taxation as a real estate investment trust (a "REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
"Code"), and
HHT's proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code, and no
actions have been taken (or not taken which are required to be taken) which
would cause such qualification to be lost. HHT expects to continue to be
organized and to operate in a manner so as to qualify as a REIT in the taxable
year ending December 31, 2005 and succeeding taxable years.
(cc)
The
Company and each of the Significant Subsidiaries have timely and duly filed all
Tax Returns required to be filed by them or have obtained a valid extension for
such filings, and all such Tax Returns are true, correct and complete in all
material respects. The Company and each of the Significant Subsidiaries have
timely and duly paid in full all material Taxes required to be paid by them
(whether or not such amounts are shown as due on any Tax Return). There are no
federal, state, or other Tax audits or deficiency assessments proposed or
pending with respect to the Company or any of the Significant Subsidiaries, and,
to the Company's knowledge, no such audits or assessments are threatened. As
used herein, the terms "Tax" or
"Taxes" mean
(i) all federal, state, local, and foreign taxes, and other assessments of a
similar nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, imposed by any
Governmental Entity, and (ii) all liabilities in respect of such amounts arising
as a result of being a member of any affiliated, consolidated, combined, unitary
or similar group, as a successor to another person or by contract. As used
herein, the term "Tax
Returns" means
all federal, state, local, and foreign Tax returns, declarations, statements,
reports, schedules, forms, and information returns and any amendments thereto
filed or required to be filed with any Governmental Entity.
11
(dd)
The Trust
will not be subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Notes, interest payable by the
Company on the Junior Subordinated Notes will be deductible by the Company, in
whole or in part, for United States federal income tax purposes, and the Trust
is not, or will not be within ninety (90) days of the date hereof, subject to
more than a de
minimis amount
of other taxes, duties or other governmental charges. There are no rulemaking or
similar proceedings before the United States Internal Revenue Service or
comparable federal, state, local or foreign government bodies which involve or
affect the Company or any subsidiary, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a Material Adverse
Effect.
(ee)
The
books, records and accounts of HHT and its subsidiaries accurately and fairly
reflect, in reasonable detail, the transactions in, and dispositions of, the
assets of, and the results of operations of, HHT and its subsidiaries. Except as
disclosed in its SEC filings, HHT and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in accordance with GAAP and to
maintain asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ff)
The
Company and the Significant Subsidiaries maintain insurance covering its
properties, operations, personnel and businesses as they deem adequate; such
insurance insures against such losses and risks to an extent and in such amounts
in all material respects as are customary with industry practice to protect the
Company and its Significant Subsidiaries and their businesses. All policies of
insurance and fidelity or surety bonds insuring the Company or any of the
Significant Subsidiaries or the Company's or Significant Subsidiaries'
respective properties, operations, personnel and businesses are in full force
and effect. The Company and each of the subsidiaries are in compliance with the
terms of such policies and instruments in all material respects. Neither the
Company nor any Significant Subsidiary has reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse Effect.
Within the past twelve months, neither the Company nor any Significant
Subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(gg)
Neither
the Company nor its subsidiaries nor, to the Company's knowledge, any person
acting on behalf of the Company and its subsidiaries including, without
limitation, any director, officer, agent or employee of the Company or its
subsidiaries has, directly or indirectly, while acting on behalf of the Company
and its subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any other unlawful payment.
12
(hh)
The
information provided by the Company and the Trust pursuant to this Purchase
Agreement and the transactions contemplated hereby does not, as of the date
hereof, and will not as of the Closing Date, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(ii)
The
Company, it’s subsidiaries and their properties, assets and operations are in
compliance with, and hold all permits, authorizations and approvals required
under, Environmental Laws (as defined below), except to the extent that failure
to so comply or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; except as
would not, individually or in the aggregate, have a Material Adverse Effect,
there are no past, present or, to the Company's knowledge after due inquiry,
reasonably anticipated future events, conditions, circumstances, activities,
practices, actions, omissions or plans that could reasonably be expected to give
rise to any material costs or liabilities to the Company or its subsidiaries
under, or to interfere with or prevent compliance by the Company or it
subsidiaries with, Environmental Laws; except as would not, individually or in
the aggregate, have a Material Adverse Effect, neither the Company nor any of
its subsidiaries (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any
pending or threatened action, suit or proceeding, (iv) is bound by any
judgment, decree or order or (v) has entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or any actual or
alleged release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below) (as used herein, "Environmental Law"
means any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, permit, license, authorization
or other binding requirement, or common law, relating to health, safety or the
protection, cleanup or restoration of the environment or natural resources,
including those relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or toxic
substances or wastes) that is regulated by or may give rise to liability under
any Environmental Law).
(jj)
In the
ordinary course of its business, the Company periodically reviews the effect of
Environmental Laws on the business, operations and properties of the Company and
its subsidiaries, and periodically identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such reviews and the amount of its established reserves, the Company
has reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse
Effect.
13
5. Representations
and Warranties of the Purchaser. The
Purchaser represents and warrants to, and agrees with, the Company and the Trust
as follows:
(a) The
Purchaser is aware that the Securities have not been and will not be registered
under the Securities Act and may not be offered or sold within the United States
or to "U.S. persons" (as defined in Regulation S under the Securities Act)
except in accordance with Rule 903 of Regulation S under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act.
(b) The
Purchaser is an "accredited investor," as such term is defined in Rule 501(a) of
Regulation D under the Securities Act.
(c) Neither
the Purchaser, nor any of the Purchaser's affiliates, nor any person acting on
the Purchaser's or the Purchaser's Affiliate's behalf has engaged, or will
engage, in any form of "general solicitation or general advertising" (within the
meaning of Regulation D under the Securities Act) in connection with any offer
or sale of the Preferred Securities.
(d) The
Purchaser understands and acknowledges that (i) no public market exists for any
of the Securities and that it is unlikely that a public market will ever exist
for the Securities, (ii) the Purchaser is purchasing the Preferred Securities
for its own account, for investment and not with a view to, or for offer or sale
in connection with, any distribution thereof in violation of the Securities Act
or other applicable securities laws, subject to any requirement of law that the
disposition of its property be at all times within its control and subject to
its ability to resell such Securities pursuant to an effective registration
statement under the Securities Act or pursuant to an exemption therefrom or in a
transaction not subject thereto, and the Purchaser agrees to the legends and
transfer restrictions applicable to the Preferred Securities contained in the
Trust Agreement, and (iii) the Purchaser has had the opportunity to ask
questions of, and receive answers and request additional information from, the
Company and is aware that it may be required to bear the economic risk of an
investment in the Securities.
(e) The
Purchaser is a company with limited liability duly incorporated, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized with all requisite (i) power and authority to execute, deliver and
perform the Operative Documents to which it is a party, to make the
representations and warranties specified herein and therein and to consummate
the transactions contemplated herein and (ii) right and power to purchase the
Preferred Securities.
(f) This
Purchase Agreement has been duly authorized, executed and delivered by the
Purchaser and no filing with, or authorization, approval, consent, license,
order registration, qualification or decree of, any governmental body, agency or
court having jurisdiction over the Purchaser, other than those that have been
made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement or to consummate the
transactions contemplated herein.
(g) The
Purchaser is a "Qualified Purchaser" as such term is defined in Section 2(a)(51)
of the Investment Company Act.
14
6. Covenants
and Agreements of the Company and the Trust. The
Company and the Trust jointly and severally agree with the Purchaser as
follows:
(a) During
the period from the date of this Agreement to the Closing Date, the Company and
the Trust shall use their reasonable best efforts and take all action necessary
or appropriate to cause their representations and warranties contained in
Section
4 hereof
to be true as of the Closing Date, after giving effect to the transactions
contemplated by this Purchase Agreement, as if made on and as of the Closing
Date.
(b) The
Company and the Trust will arrange for the qualification of the Preferred
Securities for sale under the securities or blue sky laws of such jurisdictions
as the Purchaser may designate and will maintain such qualifications in effect
so long as required for the sale of the Preferred Securities. The Company or the
Trust, as the case may be, will promptly advise the Purchaser of the receipt by
the Company or the Trust, as the case may be, of any notification with respect
to the suspension of the qualification of the Preferred Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(c) Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates to, nor will either of them permit any person acting on its or their
behalf (other than the Purchaser) to, resell any Preferred Securities that have
been acquired by any of them.
(d) Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to, engage in any "directed
selling efforts" within the meaning of Regulation S under the Securities Act
with respect to the Securities.
(e) Neither
the Company nor the Trust will, nor will either of them permit any of their
Affiliates or any person acting on their behalf to, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of any of the Securities under
the Securities Act.
(f) Neither
the Company nor the Trust will, nor will either of them permit any of its
Affiliates or any person acting on their behalf to, engage in any form of
"general solicitation or general advertising" (within the meaning of Regulation
D) in connection with any offer or sale of the any of the Securities.
(g) So long
as any of the Securities are outstanding, (i) the Securities shall not be listed
on a national securities exchange registered under section 6 of the Exchange Act
or quoted in a U.S. automated inter-dealer quotation system and (ii) neither the
Company nor the Trust shall be an open-end investment company, unit investment
trust or face-amount certificate company that is, or is required to be,
registered under section 8 of the Investment Company Act, and, the Securities
shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3).
15
(h) Each of
the Company and the Trust shall furnish to (i) the holders, and subsequent
holders of the Preferred Securities, (ii) Xxxxx Bros. Securities, LLC (at 0000
Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other address as designated by Xxxxx
Bros. Securities, LLC) and (iii) any beneficial owner of the Securities
reasonably identified to the Company and the Trust (which identification may be
made by either such beneficial owner or by Xxxxx Bros.), a duly completed and
executed certificate in the form attached hereto as Annex
F,
including the financial statements referenced in such Annex, which certificate
and financial statements shall be so furnished (or caused to be furnished) by
the Company and the Trust not later than forty five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the Company and
not later than ninety (90) days after the end of each fiscal year of the
Company.
(i) The
Company will, during any period in which it is not subject to and in compliance
with section 13 or 15(d) of the Exchange Act, or it is not exempt from such
reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under
the Exchange Act, shall provide (or cause to be provided) to each holder of the
Securities and to each prospective purchaser (as designated by such holder) of
the Securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities Act.
If the Company and the Trust are required to register under the Exchange Act,
such reports filed in compliance with Rule 12g3-2(b) shall be sufficient
information as required above. This covenant is intended to be for the benefit
of the Purchaser, the holders of the Securities, and the prospective purchasers
designated by the Purchaser and such holders, from time to time, of the
Securities.
(j) Neither
the Company nor the Trust will, until one hundred eighty (180) days following
the Closing Date, without the Purchaser's prior written consent, offer, sell,
contract to sell, grant any option to purchase or otherwise dispose of, directly
or indirectly, (i) any Preferred Securities or other securities
substantially similar to the Preferred Securities (a) other than as
contemplated by this Purchase Agreement and (b) other than offerings of
"REIT perpetual preferred stock," or (ii) any other securities convertible
into, or exercisable or exchangeable for, any Preferred Securities or other
securities substantially similar to the Preferred Securities.
(k) HHT will
use its reasonable best efforts to meet the requirements to qualify as a REIT
under Sections 856 through 860 of the Code, effective for the taxable year
ending December 31, 2005 (and each fiscal quarter of such year) and succeeding
taxable years.
(l) The
Company shall not identify the Purchaser or Xxxxx Bros. Securities, LLC in a
press release or any other public statement without the consent of Purchaser or
Xxxxx Bros. Securities, LLC, as applicable provided, that the Company shall not
be prohibited from making any public disclosure that it deems, upon advice of
counsel, to be necessary in order to comply with the requirements of the federal
securities laws.
7. Payment
of Expenses. The
Company, as depositor of the Trust, agrees to pay all costs and expenses
incident to the performance of the obligations of the Company and the Trust
under this Purchase Agreement, whether or not the transactions contemplated
herein are consummated or this Purchase Agreement is terminated, including all
costs and expenses incident to (i) the authorization, issuance, sale and
delivery of the Preferred Securities and any taxes payable in connection
therewith; (ii) the fees and expenses of qualifying the Preferred
Securities under the securities laws of the several jurisdictions as provided in
Section
6(b);
(iii) the fees and expenses of the counsel, the accountants and any other
experts or advisors retained by the Company or the Trust; and (iv) the fees and
all reasonable expenses of the Property Trustee, the
Delaware Trustee, the
Indenture Trustee and any other trustee or paying agent appointed under the
Operative Documents, including the fees and reasonable disbursements of counsel
for such trustees, which fees shall not exceed a $2,000 acceptance fee, $3,500
for the fees and expenses of Xxxxxxxx, Xxxxxx & Finger, P.A., special
Delaware counsel retained by the Delaware Trustee in connection with the
Closing, and $4,000 in
administrative fees annually.
16
If the
sale of the Preferred Securities provided for in this Purchase Agreement is not
consummated because any condition set forth in Section
3 hereof
to be satisfied by either the Company or the Trust is not satisfied, because
this Purchase Agreement is terminated pursuant to Section
9 or
because of any failure, refusal or inability on the part of the Company or the
Trust to perform all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder other than by reason of a default by the
Purchaser, the Company will reimburse the Purchaser upon demand for all
reasonable out-of-pocket expenses (including the fees and expenses of each of
the Purchaser's counsel specified in subparagraph (iv) of the immediately
preceding paragraph) that shall have been incurred by the Purchaser in
connection with the proposed purchase and sale of the Preferred Securities.
Neither the Company or the Trust shall in any event be liable to the Purchaser
for the loss of anticipated profits from the transactions contemplated by this
Purchase Agreement.
8. Indemnification.
a) The
Sellers agree, jointly and severally to indemnify and hold harmless the
Purchaser and Xxxxx Bros. Securities LLC (collectively, the "Indemnified
Parties") and
the Indemnified Parties' respective partners, directors and officers and each
person who "controls" the Indemnified Parties within the meaning of the
Securities Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any information or documents furnished or made
available to the Purchaser by or on behalf of the Sellers, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(iii) the breach or alleged breach of any representation, warranty or
agreement of the Sellers contained herein, and agrees to reimburse each such
Indemnified Party, as incurred, for any legal or other expenses reasonably
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Sellers may otherwise have.
(b) The
Purchaser and Xxxxx Bros. Securities LLC ("Xxxxx Bros.") agree to indemnify and
hold harmless the Sellers and each person who "controls" each Seller within the
meaning of the Securities Act or the Exchange Act, and the respective partners,
officers, directors and trustees thereof (each an "Indemnified Party") against
any losses, claims, damages, or liabilities, joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon the breach or alleged breach of
any representation, warranty or agreement of the Purchaser contained in Section
6, and agree to reimburse each such Indemnified Party for all costs, expenses,
damages, losses or liabilities as they are incurred and arising
therefrom.
17
(c) Promptly
after receipt by an Indemnified Party under this Section 8 of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8,
promptly notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve
the indemnifying party from liability under paragraph (a) or (b), as applicable,
above unless and to the extent that such failure results in the forfeiture by
the indemnifying party of material rights and defenses and (ii) will not,
in any event, relieve the indemnifying party from any obligations to any
Indemnified Party other than the indemnification obligation provided in
paragraph (a) or (b), as applicable, above. Purchaser shall be entitled to
appoint counsel to represent the Indemnified Party in any action for which
indemnification is sought; provided, however, that if an Indemnified Party is,
or is affiliated with, Sellers as set forth in Section 8(b) above, the Company
shall be entitled to appoint counsel to represent such Indemnified Party in any
action for which indemnification is sought. An indemnifying party may
participate at its own expense in the defense of any such action; provided, that
counsel to the indemnifying party shall not (except with the consent of the
Indemnified Party) also be counsel to the Indemnified Party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. An indemnifying party will not, without
the prior written consent of the Indemnified Parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not the Indemnified Parties are actual or potential
parties to such claim, action, suit or proceeding) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action, suit or
proceeding.
9. Contribution.
(a) In order
to provide for just and equitable contribution in circumstances under which the
indemnification provided for in Section
8 hereof
is for any reason held to be unenforceable for the benefit of an Indemnified
Party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers, on the one
hand, and the Purchaser and Xxxxx Bros., on the other hand, from the offering of
the Preferred Securities or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Sellers, on the one hand, and the Purchaser and Xxxxx
Bros., on the other hand, in connection with the statements, omissions or
breaches, which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
18
(b) The
relative benefits received by the Sellers, on the one hand, and the Purchaser
and Xxxxx Bros., on the other hand, in connection with the offering of the
Preferred Securities shall be deemed to be in the same respective proportions as
the total net proceeds from the offering of the Preferred Securities (before
deducting expenses) received by the Sellers and the benefits received by the
Purchaser and Xxxxx Bros. bear to the aggregate of such net proceeds and
commissions.
(c) The
Sellers, the Purchaser and Xxxxx Bros. agree that it would not be just and
equitable if contribution pursuant to this Section
9 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section
9. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an Indemnified Party and referred to above in this Section
9 shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement, omission or alleged omission or breach or
alleged breach.
(d) Notwithstanding
any provision of this Section
9 to the
contrary, the Purchaser and Xxxxx Bros. shall not be required to contribute any
amount in excess of the benefit received by the Purchaser and Xxxxx Bros.
pursuant to their involvement in the issuance of the Preferred
Securities.
(e) No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(f) For
purposes of this Section 9, the Purchaser, Xxxxx Bros., each person, if any, who
controls the Purchaser or Xxxxx Bros. within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective partners,
directors and officers of the Purchaser and Xxxxx Bros. or any such controlling
person shall have the same rights to contribution as the Purchaser and Xxxxx
Bros., while each partner, officer and director of the Company, each trustee of
the Trust and each person, if any, who controls the Sellers within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Sellers.
19
10. Termination;
Representations and Indemnities to Survive. This
Purchase Agreement shall be subject to termination in the absolute discretion of
the Purchaser, by written notice given to the Company and the Trust prior to
delivery of and payment for the Preferred Securities, if prior to such time (i)
a downgrading shall have occurred in the rating accorded the Company's debt
securities or preferred stock, if any, by any "nationally recognized statistical
rating organization," as that term is used by the Commission in Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company's debt securities or preferred
stock, if any, (ii) the Trust shall be unable to sell and deliver to the
Purchaser at least $25,000,000 stated liquidation value of Preferred Securities,
(iii) a suspension or material limitation in trading in securities generally
shall have occurred on the New York Stock Exchange, (iv) a suspension or
material limitation in trading in any of the Company's securities shall have
occurred on the American Stock Exchange, or (v) there shall have occurred
any outbreak or escalation of hostilities, or declaration by the United States
of a national emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the Purchaser's judgment,
impracticable or inadvisable to proceed with the offering or delivery of the
Preferred Securities. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the Trust or their
respective officers or trustees and of the Purchaser set forth in or made
pursuant to this Purchase Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Purchaser, the
Company or the Trust or any of the their respective officers, directors,
trustees or controlling persons, and will survive delivery of and payment for
the Preferred Securities. The provisions of Sections
7, 8, and
9 shall
survive the termination or cancellation of this Purchase Agreement.
11. Amendments. This
Purchase Agreement may not be modified, amended, altered or supplemented, except
upon the execution and delivery of a written agreement by each of the parties
hereto.
12. Notices.
(a) Any
communication shall be given by letter or facsimile, in the case of notices to
the Trust, to it at:
Hersha
Statutory Trust I
000
Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Facsimile:000-000-0000
Attention:
Xxxxxx Xxxxxx
with a
copy to:
Hunton
& Xxxxxxxx LLP
Riverfront
Plaza, East Tower
000 Xxxx
Xxxx Xxxxxx
Xxxxxxxx,
Xxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxx, Xx.
20
in the
case of notices to the Company, to it at:
000
Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Facsimile:
000-000-0000
Attention:
Xxxxxx Xxxxxx
and in
the case of notices to the Purchaser, to it at:
Xxxxxxx
Xxxxx International
c/x Xxxxx
Bros. Securities, LLC
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Asset Backed Securities
with a
copy to:
Xxxxxxxxx
& Xxxxxxxx LLP
000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
XX 00000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxx
(b) Any such
communication shall take effect, in the case of a letter, at the time of
delivery and in the case of facsimile, at the time of dispatch.
(c) Any
communication not by facsimile shall be confirmed by letter but failure to send
or receive the letter of confirmation shall not invalidate the original
communication.
13. Successors
and Assigns. This
Purchase Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns. Nothing expressed
or mentioned in this Purchase Agreement is intended or shall be construed to
give any person other than the parties hereto and the affiliates, directors,
officers, employees, agents and controlling persons referred to in Section
8 hereof
and their successors, assigns, heirs and legal representatives, any right or
obligation hereunder. None of the rights or obligations of the Company or the
Trust under this Purchase Agreement may be assigned, whether by operation of law
or otherwise, without the Purchaser's prior written consent. The rights and
obligations of the Purchaser under this Purchase Agreement may be assigned by
the Purchaser without the Company's or the Trust's consent; provided that the
assignee assumes the obligations of the Purchaser under this Purchase
Agreement.
21
14. Applicable
Law. THIS
PURCHASE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW).
15. Submission
to Jurisdiction. ANY
LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR
ARISING OUT OF THIS PURCHASE AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE
COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE
AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND
COURTS OF APPEALS THEREFROM) FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN
CONNECTION WITH THIS PURCHASE AGREEMENT.
16. Counterparts
and Facsimile. This
Purchase Agreement may be executed by any one or more of the parties hereto in
any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
This Purchase Agreement may be executed by any one or more of the parties hereto
by facsimile.
22
IN
WITNESS WHEREOF, this Purchase Agreement has been entered into as of the date
first written above.
|
Hersha
Hospitality Limited
Partnership | ||
| By: Hersha Hospitality Trust, its General Partner | ||
| |
|
|
| By: | ||
|
Name: | ||
|
Title: | ||
|
Hersha
Statutory Trust I | ||
| By: Hersha Hospitality Limited Partnership, as Depositor | ||
| |
|
|
| By: | ||
|
Name: | ||
|
Title: | ||
23
|
Xxxxxxx
Xxxxx International | ||
| |
|
|
| By: | ||
|
Name:
| ||
|
Title:
| ||
24
SCHEDULE
1
List
of Significant Subsidiaries
25
SCHEDULE
2
Ownership
of Subsidiaries
|
Entity |
Ownership |
State
of Formation |
Other
Qualification |
|
NA |
MD |
PA | |
|
Hersha
Hospitality Limited Partnership (“HHLP”) |
NA |
VA |
PA |
|
Hersha
Hospitality, LLC (“HH LLC”) |
100%
BY HHLP |
VA |
MD,
PA |
|
Hersha
Hospitality Limited Liability Company - Carlisle |
100%
BY HHLP |
DE |
PA |
|
Hersha
Hospitality Limited Liability Company - Danville |
100%
BY HHLP |
DE |
PA |
|
Hersha
Hospitality Limited Liability Company - Duluth I |
100%
BY HHLP |
DE |
GA |
|
Hersha
Hospitality Limited Liability Company - Duluth II |
100%
BY HHLP |
DE |
GA |
|
Hersha
Hospitality Limited Liability Company - Hershey |
100%
BY HHLP |
XX |
- |
|
Xxxxxx
Hospitality Limited Liability Company - New Columbia |
100%
BY HHLP |
XX |
- |
|
Xxxxxx
Hospitality Limited Liability Company - New Cumberland, |
100%
BY HHLP |
DE |
GA |
|
Hersha
Hospitality Limited Liability Company - Newnan |
100%
BY HHLP |
DE |
GA |
|
Hersha
Hospitality Limited Liability Company - Peachtree |
100%
BY HHLP |
DE |
GA |
|
Hersha
Hospitality Limited Liability Company - Selinsgrove |
100%
BY HHLP |
DE |
PA |
|
Hersha
Hospitality Limited Liability Company - West Hanover, |
100%
BY HHLP |
DE |
PA |
|
HHLP
Valley Forge Associates |
99%
BY HHLP
1%
BY HH LLC |
PA |
- |
|
944
Associates |
99%
BY HHLP
1%
by Hersha Hospitality Limited Liability Company-Carlisle |
PA |
- |
|
1244
Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-New
Cumberland |
PA |
- |
1
|
Entity |
Ownership |
State
of Formation |
Other
Qualification |
|
2144
Associates - Hershey |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-Hershey |
PA |
- |
|
2144
Associates - New Columbia |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-New
Columbia |
PA |
- |
|
2144
Associates - Selinsgrove |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability
Company-Selinsgrove |
PA |
- |
|
2444
Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-West
Hanover |
PA |
- |
|
2844
Associates |
99%
by HHLP
1%
by HH LLC |
PA |
- |
|
3044
Associates |
99%
by HHLP and
1%
by HH LLC |
PA |
MD |
|
3144
Associates |
99%
by HHLP
1%
by HH LLC |
PA |
- |
|
3544
Associates |
99%
by HHLP
1%
by HH LLC |
PA |
- |
|
5644
Duluth I Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-Duluth I |
PA |
GA |
|
5744
Duluth II Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-Duluth II |
PA |
GA |
|
5844
Newnan Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-Newnan |
PA |
- |
|
5944
Peachtree Associates |
99%
by HHLP
1%
by Hersha Hospitality Limited Liability Company-Peachtree |
PA |
GA |
|
5544
JFK III Associates |
99%
by HHLP
1%
by HH LLC |
PA |
NY |
|
Metro
Two Hotel, LLC |
100%
by HHLP |
FL |
NY |
2
|
Entity |
Ownership |
State
of Formation |
Other
Qualification |
|
HT/CNL
Metro Hotels, LP |
33.33%
by HHLP
66.67%
by CNL Hospitality Partners, LP |
DE |
- |
|
Chelsea
Grand East, LLC |
100%
by HT / CNL Metro Hotels, LP |
NY |
- |
|
44
New England Management Company |
100%
by HHLP |
VA |
- |
|
HHM
Leasehold Interests, Inc. |
99%
by Hersha Hospitality Management LP
1%
by HHLP |
XX |
- |
|
Xxxxxx
CNL TRS, Inc. |
100%
by HT / CNL Metro Hotels, LP |
DE |
- |
|
Inn
America, LLC |
50%
by HHLP |
NJ |
- |
3
SCHEDULE
3
Properties
Encumbered by Liens Relating to Financing
|
Property |
Lender |
|
Hampton
Inn |
|
|
Carlisle |
Lehman
Brothers |
|
Danville |
Xxxxxx
Brothers |
|
Selinsgrove |
Xxxxxx
Brothers |
|
Hershey |
Waypoint
Bank |
|
Newnan |
GECC |
|
Peachtree
City
Cheslea,
NY
Linden,
NJ |
GECC
GECC
Yardville
National Bank |
|
Holiday
Inn |
|
|
Harrisburg |
Xxxxxx
Brothers |
|
Holiday
Inn Express |
|
|
Hershey |
Lehman
Brothers |
|
New
Columbia |
Xxxxxx
Brothers |
|
Duluth |
Xxxxxx
Brothers |
|
Long
Island City, NY
Harrisburg,
PA |
GE
Capital
Sovereign
Bank (Line of Credit) |
|
Doubletree
Club |
|
|
Jamaica,
NY |
GE
Capital |
|
Comfort
Inn/Suites |
|
|
Harrisburg |
Xxxxxx
Brothers |
|
Duluth
Frederick,
MD |
Xxxxxx
Brothers
Peoples
Bank |
|
Mainstay
Suites/Sleep Inn |
|
|
Valley
Forge, PA |
Sovereign
Bank (Line of Credit) |
|
Mainstay
Suites |
|
|
Frederick
MD |
Peoples
Bank |
|
Line
of Credit |
Sovereign
Bank |
|
Hilton
Garden Inn |
|
|
Edison,
NJ |
Yardville
National Bank |
|
Glastonbury,
CT |
GE
Capital |
|
Gettysburg,
PA |
M&T
Bank |
|
Residence
Inn |
|
|
Greenbelt,
MD |
Hersha
Capital, Inc. |
|
Framingham,
MA |
Central
Cooprative Bank |
1
| Property | Lender |
|
Courtyard
by Marriott |
|
|
Ewing,
NJ |
Yardville
National Bank |
|
Four
Points Sheraton |
|
|
Revere,
MA |
Citizens
Bank of Massachusetts |
2
